OPINION: Campaign donor regulations no easy fix

IN 2010, I told a parliamentary inquiry into public funding of election campaigns: ‘‘It is possible to create new rules, but it is impossible to legislate for the integrity to follow their spirit.’’

While supporting reform of the electoral funding system to address concerns about party donors being beneficiaries of government decisions, I warned of the prospect of what I referred to then as a ‘‘creative bypass’’ of any new laws.

Three years later, those words have proven prophetic, given this week’s Independent Commission Against Corruption (ICAC) revelations about the labyrinthine system of money handling that allegedly directed hundreds of thousands of illicit dollars into the campaigns of select Liberal Party candidates at the last state election.

An inquiry that started off as a small-scale investigation into a $5000 donation by a developer has become a rapidly unfolding scandal that has reeled in leading business and political figures and, at last count, relegated four Liberal MPs – including a former minister – to the crossbenches. And all this just two weeks after a separate ICAC investigation claimed the scalp of the NSW premier.

While it might make for great theatre, the ICAC proceedings belittle all politicians and erode confidence in our democratic system. There is no easy fix for the issues around lobbying and electoral funding, but the system must become fairer and more transparent.

Former premier Barry O’Farrell introduced tighter regulations in 2012 that will be in place for next year’s election. However, a critical part of the reforms restricting donations from corporations and groups was successfully appealed in the High Court late last year by Unions NSW, leaving the legislation in limbo and new Premier Mike Baird with a significant challenge as he attempts to restore public faith in NSW politics.

The idea of full public funding of election campaigns is gaining momentum, but I am not convinced it is the solution. Apart from being a drain on the public purse, it invites opportunism from half-hearted candidates seeking to draw attention to themselves or their cause, with the inevitable result being tablecloth-sized ballot papers and a proliferation of single-issue candidates.

The new NSW laws do limit campaign expenditure, but with the cap set as high as $166,700 for candidates at the 2015 election, the system still favours those with significant financial resources.

A more modest cap would help ensure candidates were elected on their merits rather than their bank balances. I’ve never had cause to spend more than about $60,000 on my state election campaigns, and have largely used my own resources.

Funding should be reported on a per-electorate basis, including an acknowledgement of the proportion of global party funds that have gone into a candidate’s campaign.

There should also be a reporting deadline one week ahead of an election so voters have the benefit of scrutinising a candidate’s donors before they go to the polls.

We cannot mandate integrity, and I doubt we can ever eliminate corrupt practices from electoral funding entirely, but the revelations of the past week only reinforce the value of the ICAC.